Flipkart claims to have over 30,000 seller on its platform, while Snapdeal claims to be marginally behind with 20,000 seller registered. While the platform keeps providing business to small merchants and sellers, it disconnects them from their customers.
How do you connect with these customers who are getting mcommerce savvy? By building your value proposition!
Rahul Singhal, co-founder and CEO of Oiral Business Limited believes that just like Google or Facebook account, every business should have its own mobile application for its customers. Taking this forward, he launched Applop in July 2015, a mobile app that helps any smartphone user to create and manage their mobile app in few steps. Just like an on-demand app partner.
Typically it takes weeks to build an Android app, first comes defining the motive of the application, followed by app design. Then comes building wireframe and backend which involves a lot of coding, and finally testing. Applop eliminates this cumbersome process by simplifying it into few simple steps.
The merchants need not code for the app, they can just register, select the theme for the application, pick the features, upload the description of the app, and it will go live on PlayStore in just 12 hours.
Once the app is up and running, retailers can request for modification or category introduction within their app simply by uploading the picture of new products and sharing the content for every category.
Apart from this, the app provides opportunity to generate extra revenue by selling in-app ad space to brands like Pond’s or Johnson & Johnson or Domino’s Pizza to run promos or push coupons for end-users.
Applop looks after complete app management starting with technology, platform, feature integration and maintenance. And a as part of after sales, it also helps clients with marketing and creating awareness about the app. They are team of 13 including co-founder & CFO, Jyoti Singhal, co-founder & CTO Anand Goel, a team of seven mobile app developers who work as backend for all the apps created on platform.
The Business Model
Applop works on a subscription model wherein the clients pay for a yearly contract which costs around $10-$15 per month. This includes building an app, customization, feature enhancement, version upgrade, UI upgrade and more. However, they get into revenues sharing for ad sales, promotions like push coupons or branding on the mobile platform of the retailer, Applop takes a share of the ad space.
In just two months, the team gained over 200 clients who have their mobile application. These are largely neighborhood retail stores and small stores, small associations and institutes who as per the company are witnessing increased traction and building deeper connect with their end-users.
On an average, these retailers are engaging with ten customer through the app daily. These engagements can be anything, from ordering to pick-up, delivery to product enquiry and more.
“We have been lucky to enter the market at the right time. Thanks to ecommerce giants like Flipkart, Snapdeal and Amazon, they have built a network of seller community, including tier 2 and tier 3 cities, who are seeing the importance of mobile-commerce. It takes only half an hour for me to pitch a retailer and bring him on board to be our customer,” shared Singhal. But the ecommerce giants are also our competition since they provide marketplace to these small merchants.”
After understanding the markets in Raipur, Bhopal and Bilaspur, Applop is now exploring Kolkata. The startup is a part of Nasscom’s 10,000 startups program (West Bengal Chapter).
It also has plans to enter other metros, starting with Bangalore, in next few weeks where he expects the growth in multiples of 100. At present, Applop gets approximately 100 app orders every month. However, it expects to reach to 500 orders every month by end of fiscal year 2015-2016, touching $90,000 in revenue. With a conversion rate of 60% to 70%, the customer acquisition cost is around $89, and they expect reach profitability once they hit 1000 order per month.
Looking ahead, Singhal plans to cover top 100 cities in India in two- three years and make en-route to global market like USA and South East Asia, crossing $270,000 revenues mark.
Competitive Landscape and Challenges
Interestingly, Applop is the only Indian player with this proposition. There are a few mobile app developers, but they work on web platform and are largely offline. This acts as an advantage for Applop to on-board more clients before the market gets crowded.
Applop is targeting market of 63 Mn retailers and 236 Mn mobile internet users. Before even Applop picks up sizable market share, it will have to invest heavily in sales and marketing largely. This would first include mapping the unorganized market of merchants, association and small businesses, and creating awareness for mcommerce. This will increase the customer acquisition cost.
Another challenge that Applop faces is collection. While giving away $15 per month for 12 months, looks more affordable than $180 a year for small companies, the burden of monthly collection falls on Applop. While they are looking at Easy Monthly Installment (EMI) option and enabling wallet payments, they still have a long way to go.
Applop has definitely started with a great business model, but would face a lot of challenges in the market. While large conglomerates are still working around untwining the web of unorganized retail market, this startup has taken up the herculean task alone.
Apart from this, Applop would face the challenge of connecting to the inventory and supply management software of the retailers. The startup is building a tablet-friendly version of the app to enable small merchants, wherein Applop will provide tablet to all merchants or order management. But this might take Applop away from its core business, making it a retail mobile solution company.